The USD fell back in April as the rise in US interest rates faded. No strong trend has yet emerged and the balance of strategies leaves a mixed picture. Still, we see opportunities in countries that are likely to make the most progress in containing the Corona Pandemic in coming months. In our view, that favors the EUR, the SEK and the CHF.
Economy and Interest Rates
Global growth held up well in the first quarter despite the spike in Corona infections and growth forecasts for 2021 have been raised further. However, there are significant differences by country and region, largely driven by the progress in fighting the Corona virus.
The USD weakened versus all major currencies in April (the USD DXY was down 2.1%). CHF, SEK and EUR performed best, while the GBP lagged behind. EM currencies gained on average 1.8% versus the USD, led by the BRL, but TRY and INR weakened.
Going into more detail: Based on our proprietary analytical framework to take scalable exchange rate positions we are taking a close look on individual currency pairs.
The USD declined further in May as vaccination and recovery momentum increased in other economies...» more